Senate poised to pass Marketplace Fairness Act

WASHINGTON (May 6, 2013) — The U.S. Senate has scheduled an early-evening vote May 6 for S. 743, the Marketplace Fairness Act, which would require online retailers to collect sales taxes for the states to where they ship goods.

The Senate invoked cloture on the bill May 2 by a 63-30 vote. If passed, the legislation would overturn a 1992 Supreme Court decision that forbade states from collecting sales taxes from companies that had no physical presence in those states. Retailers with annual sales of under $1 million would be exempt.

Hundreds of trade associations, labor unions and retail organizations, including the Tire Industry Association (TIA) and the National Retail Federation, support the bill. These organizations say the ban on state taxes for Internet sales hurts "brick-and-mortar" retailers.

"This has triggered lost profits, layoffs and even bankruptcies and store closings," said Gordon Gough, executive director of the Ohio Tire & Automotive Association, in a May 2012 op-ed article for the Columbus Dispatch.

The House version of the Marketplace Fairness Act faces an uncertain future because of Republican opposition to increasing state sales tax revenue, according to Roy Littlefield, TIA executive vice president. "However, Republican governors working to balance their budgets may soften that opposition," he added.

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